Volkswagen seeks changes in U.S. fuel rule

Volkswagen has pressed U.S. regulators to change a proposal to double auto fuel efficiency, arguing the plan puts it at a competitive disadvantage and unfairly de-emphasizes clean diesel engines.

Volkswagen did not sign onto an agreement backed by virtually every other major U.S. and overseas car company that underpinned the Obama administration proposal on Wednesday to boost efficiency targets to 54.5 miles per gallon by 2025.

Europe's largest carmaker said it remains hopeful changes will be made to reduce incentives in the plan that favor the biggest pickups -- a staple of U.S. automakers General Motors , Chrysler and Ford .

It also wants some benefit for clean diesel, which bolsters fuel efficiency efforts in Europe and is featured on Volkswagen's mid-size Passat TDI, which gets 43 mpg on the highway and is built in Chattanooga, Tennessee.

Volkswagen's U.S. sales grew 40 percent in October to 28,000 units, the biggest gain for any manufacturer, and are up nearly 25 percent for the year through last month.

A lot of good work has been done, but there is room and a need for some improvements to keep a level playing field for all automakers to attain the challenging new goals, said Jonathan Browning, chief executive of Volkswagen Group of America.

David Geanacopoulos, Volkswagen America's general counsel, told Reuters that company officials have met with transportation and environmental regulators as well as officials at the White House and said the company's principal concern is fairness.

We don't know whether changes will be made, but we're hoping that our views will be taken into account. There is a need for improvement. We're optimistic, he said.

Obama administration officials said they were open to hearing different views from car companies during the 60-day public comment period but stood by their decision to push incentives for gasoline/electric hybrids and other electric vehicles.

We're optimistic about about significant improvements in combustion and diesel engines, said Margo Oge, director of EPA's transportation and air quality office.

On the other hand, electric powertrain is a new technology. The cost effectiveness is not there yet, but there is a huge potential for reducing oil imports.

President Barack Obama wants 1 million electric cars on U.S. roads by 2015, a goal auto insiders say is overly ambitious considering that hybrids, which have been around for a decade, and newly arriving plug-in electric cars make account for less than 3 percent of the U.S. sales.

Japanese manufacturers dominate the hybrid market while GM's Chevy Volt is the most heavily promoted plug-in electric available in U.S. showrooms.

Volkswagen has four clean diesels on display at this week's Los Angeles Auto Show, including the Jetta, Golf and the TDI. Mercedes , BMW and Audi, a unit of Volkswagen, were also set to exhibit the technology.

Volkswagen's Touareg hybrid is among 35 hybrid and plug-ins rolled out for the show. Seven fully electric cars are on display, including the Ford Focus BEV prototype, the Nissan Leaf and the Toyota RAV4.